Matternet: Delivery Drones that Are Delivering NOW

This past week we saw Amazon stir things up by exciting the imagination of their customers with the promise of Amazon Prime Air, a future service that will deliver packages up to five pounds in 30 minutes or less using small drones. We’ve been teased by the idea of delivery drones for a while now, but what’s not so commonly known is that there’s a company that’s actively using drones for delivery right now. That company is called Matternet.

Founded in 2011, Silicon Valley based startup Matternet came out of Singularity University and has taken in just $3.5 million in seed money to develop their delivery drone, the Matternet ONE, along with the cloud based infrastructure needed to support it. Their vision for drone delivery involves unmanned aircrafts making deliveries along more regular, fixed routes for cases like high-speed delivery of medical supplies and pharmaceuticals. Incredibly, more than 66% of the goods we access everyday weigh less than 1 kilo (2.2) pounds such as medicine, documents, and electronic goods. The below Matternet ONE drone can deliver a 2.2 pound payload a distance of 20 kilometers (12.42 miles) at a speed of 40 mph on a single charge.

Operating this drone is a breeze. Place one landing station at Point A. Place another landing station at Point B. Download the smartphone app. Place cargo in drone. Open smart phone app, select target landing station, and click “Go”. The drone will fly autonomously paying attention to the path of other drones, the required altitude it should fly at, and at the same time avoiding no-fly zones and obstacles like trees. If anything goes wrong during the flight, there’s a parachute to make sure your payload floats gracefully to earth from 50-100 yards off the ground, the height the drone will fly at.

What about costs? Matternet plans to lease their quadcopters to other businesses for the purposes of making deliveries and plans to charge $1,000 per drone per month which includes everything. The Matternet ONE drone will cost about $5,000 to buy outright (invitation only at the moment), with presumably some sort of subscription service to the cloud based infrastructure that controls flight routes. Matternet estimates that a 150-drone network servicing 140 square miles would cost $900,000. That would cover about the same area as the city of Denver Colorado.

Since the Company’s inception in 2011, the technology has been tested in the field by delivering medical supplies in harsh environments like Haiti, Bhutan, the Dominican Republic and Papua New Guinea. In Bhutan, Matternet has worked with the World Health Organization to test distributing medicine to nearly 180 remote clinics. According to an interview with the WSJ, Matternet states that nearly 80% of those clinics are within a 30-minute drone flight of a hospital. Even though Matternet only has a range of 12.42 miles, they are planning to extend that range by deploying recharging stations where a drone can land and swap batteries quickly.

Matternet is not just focusing on humanitarian applications to test their drone network. In July of this year, Swiss Post, Swiss WorldCargo and Matternet began jointly testing the commercial use of logistics drones. Just last month, Matternet appointed the ex-Chief Cargo Officer of Swiss International Air Lines as their new Head of Global Business Development.

Amazon’s delivery drones plan to carry payloads of up to 20X the weight of those carried by the Matternet ONE. While Prime Air vehicles will take advantage of sophisticated “sense and avoid” technology much like Matternet’s drones, Amazon plans to distribute to variable points with no landing stations, not fixed points with landing stations. This means that the Matternet drones can fly twice the distance since they are able to charge once they reach their location. The other benefit Matternet has is that they are testing their autonomous flight technology in real-life situations where legislation doesn’t exist. They can easily work the kinks out of their system so that when it comes to adhering to legislation, it will be easy enough to add those restrictions to their autonomous flight system.

As we’ve talked about before, there just aren’t that many drone stocks available for retail investors to participate in the booming drone market. Buying shares of Amazon.com won’t give you any meaningful exposure to delivery drones, no matter what the pundits say. We’re just going to have to wait for some of these exciting drone startups to IPO.